Chartered Institute of Public Finance and Accountancy

Agenda

Committee PRUDENTIAL CODE STEERING GROUP
Date 10 May 2002
Venue Council Chamber, CIPFA, 3 Robert Street, London, WC2N 6RL
Subject Road Testing the Draft Prudential code in 2002
Author Maureen Wellen, Policy & Technical Manager, Capital and Treasury

PURPOSE

To receive a report for information on the programme of road testing for the draft Prudential Code in 2002.

REPORT

  1. CIPFA is undertaking road testing of the draft Prudential Code during 2002. The prudential framework will be a radical departure from the current highly centralised capital control frameworks, and road testing is an important step leading to the introduction of the new system.

  2. Demand for participation in the road testing has exceeded expectations, with over 70 local authorities in England, 4 in Wales and 10 in Scotland offering to road test the code. This is a very positive outcome, which demonstrates the high level of interest in the further development of the prudential framework. However, unfortunately, it has meant that it has not been possible to accept all the offers that people have made to contribute. Participants have been selected by date of response subject to the need to ensure a suitable range of authorities. A list of the authorities that will road test the code is attached as the appendix to this report.

  3. The first workshops for the authorities that will road test the code will be held as follows:

    • 9 May York
    • 14 May Cardiff
    • 21 May London
    • 29 May Edinburgh.

  4. The local authorities concerned will be asked to road test the code for a period of 4 to 6 months. A second workshop for participating authorities will be held in September/October and authorities will be asked to document their experience of road testing for publication.

  5. Road testing will involve both technical and strategic dimensions:

    • the technical dimension will include calculating the numerical prudential indicators for the authority. This will: test the definitions in practical application; illustrate their quantum and how they inter-relate together in a real environment; and demonstrate the ease or otherwise with which they can be monitored. We will also ask each authority to record its current practice for charging for depreciation.

    • the strategic dimension will examine how the prudential framework relates to strategic planning, asset management planning and option appraisal; and the procedures that would be adopted by the authority for decision making.

RECOMMENDATION

The Steering Group is asked to note this report on the programme of road testing for the draft Prudential Code in 2002.

LIST OF LOCAL AUTHORITIES WHO WILL ROAD TEST THE DRAFT PRUDENTIAL CODE IN 2002

ENGLAND
Barrow-in-Furness Borough Council
Bedford Borough Council
Birmingham City Council
Broxtowe Borough Council
Buckinghamshire and Milton Keynes Fire Authority
Cleveland Police
Corporation of London
Darlington Borough Council
Devon County Council
Hambleton District Council
Humberside Fire Authority
Huntingdonshire District Council
Kent County Council
Lancashire County Council
London Borough of Hammersmith and Fulham
London Borough of Southwark
Medway Council
Nottinghamshire County Council
Reading Borough Council
Salford City Council
Sheffield City Council
Teignbridge District Council
Weymouth and Portland Borough Council
Wolverhampton City Council

WALES
Bridgend County Borough Council
Denbighshire County Council
Powys County Council
Torfaen County Borough

SCOTLAND
Aberdeen City Council
Aberdeenshire Council
City of Edinburgh Council
Glasgow City Council
Lothian and Borders Joint Fire Brigade
Renfrewshire Council
South Ayrshire Council
South Lanarkshire Council
Strathclyde Fire Brigade
West Dunbartonshire Council